Skip to content

CMA Foundation · Fundamentals of Business Economics and Management · Stewardship Theory and Agency Theory of Management

According to stewardship theory, how are managers fundamentally viewed in relation to the organisation they run?

Stewardship theory views managers as collectivist, pro-organisational custodians who act in the best interest of owners and the organisation. Their goals align with those of the principals, so they are trusted rather than suspected. The opportunist view belongs to agency theory.

  1. AAs opportunists who pursue personal gain at the owners' expense
  2. BAs collectivist, pro-organisational individuals who act as good custodians of the owners' resourcesCorrect
  3. CAs external contractors who must be closely monitored through penalties
  4. DAs passive employees who are motivated only by fixed salary

Explanation

Stewardship theory assumes managers are trustworthy and want to do a good job, aligning their goals with the organisation's objectives. The view that managers are self-serving opportunists belongs to agency theory, so option A is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Stewardship Theory and Agency Theory of Management shows your real accuracy, how long you take and where you lose marks.

Practise Stewardship Theory and Agency Theory of ManagementFree diagnostic mock

More Stewardship Theory and Agency Theory of Management questions